What is a 'no gap' or 'known gap' arrangement?

"No gap" is an agreement where your specialist charges only the Medicare Benefits Schedule MBS fee. Your private health fund then covers the remaining amount above what Medicare pays, meaning you have no out-of-pocket costs for the doctor's fee. A "known gap" arrangement means your specialist charges a bit more than the MBS fee but has an agreement with your health fund to limit your out-of-pocket payment to a specific agreed amount. This means you will pay a small fixed fee per service. Always confirm these arrangements with your specialist and health fund before any treatment.

What is the cost difference between public and private hospitals?

In a public hospital you will generally not pay any out-of-pocket costs for treatment if you are admitted as a public patient. Medicare covers all the costs including doctor's fees and accommodation. In a private hospital you will typically have out-of-pocket costs. Medicare pays 75% of the Medicare Benefits Schedule (MBS) fee for your doctor's services and your private health insurance will cover some of the remaining fees and hospital costs. Any amount charged by the doctor above the MBS fee becomes your out-of-pocket expense or gap.

Does private health insurance cover emergency department visits?

Private health insurance generally does not cover the cost of emergency department visits in either public or private hospitals. These services are typically covered by Medicare. If you are admitted to a private hospital from the emergency department, your private health insurance would then start to cover your inpatient costs according to your policy and any applicable waiting periods or excesses. If you attend a private emergency department and are not admitted you will usually pay for the consultation yourself.

Are medical out-of-pocket expenses tax deductible in Australia?

Generally most out-of-pocket medical expenses are not tax deductible in Australia. However there are specific situations where some medical related expenses might be deductible, such as for certain medical travel or if you are eligible for the National Disability Insurance Scheme (NDIS). It is always best to check with a qualified tax advisor or the Australian Taxation Office for personal advice.

How do health insurance waiting periods impact out-of-pocket costs?

Waiting periods are the time you must wait after buying your health insurance before you can claim benefits for certain treatments. If you receive treatment during a waiting period you will have to pay the full cost of the service yourself leading to out-of-pocket expenses. Common waiting periods include 2 months for most hospital treatments, 12 months for pre-existing conditions and 12 months for pregnancy and birth (obstetrics). Always check your policy's Product Disclosure Statement PDS for specific waiting periods.

What is the difference between hospital cover and extras cover?

Hospital cover helps pay for the costs of in-hospital treatments such as accommodation, theatre fees and doctor's fees when you are admitted as a private patient. This covers services like surgery, diagnostic tests and intensive care. Extras cover sometimes called ancillary cover helps pay for services received outside of a hospital. This can include things like dental, optical, physiotherapy, chiropractic treatment and remedial massage. It is designed to cover day-to-day health services.

Medical costs comparison for Australia

Who’s this health cover for?

Private hospital insurance will not cover everything when you go into hospital.
The difference between the cost of a treatment and what is covered is called the gap.
These out-of-pocket costs can be estimated ahead of time by using government data or calling your health fund.

How out of pocket medical costs work in Australia

If you have Medicare, you have 2 options for receiving hospital treatment: public or private. In the public system, Medicare will generally pay all of your costs.

If you choose private hospital care, your costs can be covered in a few ways. Medicare will still pay some, but a private health fund can also cover some of your fees. If you don't have private health cover, then you'd need to pay for the entire private procedure. If you do have private hospital cover for your treatment, then there may still be out of pocket costs.

Finder survey: How many Australians of different ages worry about being able to pay for medical bills?

Response	75+ yrs	65-74 yrs	55-64 yrs	45-54 yrs	35-44 yrs	25-34 yrs	18-24 yrs
No	61.36%	50.58%	50.93%	40.24%	36.76%	47.89%	43.53%
Yes	25%	32.56%	35.4%	40.24%	43.24%	34.74%	44.71%
Somewhat	13.64%	16.86%	13.66%	19.53%	20%	17.37%	11.76%

Source: Finder survey by Pure Profile of 1006 Australians, December 2023

Compare medical costs across Australia

The table below compares some costs of common medical procedures in 5 different states. The data comes from Medical Costs Finder, a tool managed by the Department of Health and Aged Care. The data was last updated on 29 September 2023.

Typical specialists’ fees refers to the cost of specialists, assistant surgeons, and anaesthetists. It doesn't include hospital fees, which are generally either mostly or fully covered by private health insurance funds.
Patients typically paid refers to the median amount paid by the typical patient, after Medicare and Private Health insurance benefits were paid.
% with no out-of-pocket costs refers to the proportion of patients that didn't have to pay any out of pocket costs.

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	33%	$1,500	$810
Ankle replacement	30%	$5,700	$1,500
Knee reconstruction	28%	$4,500	$2,300
Knee arthroscopy	45%	$2,500	$850
Breast biopsy	41%	$2,200	$440
Breast reduction	9%	$11,000	$8,600
Caesarean section (complex)	43%	$4,600	$500
Caesarean section (no complications)	51%	$3,500	$500
Cataract surgery	69%	$2,100	$500
Colonoscopy	83%	$1,300	$250
Dialysis	NA	NA	NA
Gastric band	NA	NA	NA
Gastric bypass	44%	$3,900	$1,100
Gastroscopy	83%	$960	$190
Heart-related angiogram	87%	$1,900	$60
Heart valve replacement (not TAVI)	34%	$15,000	$510
Hip replacement (bilateral)	22%	$9,900	$5,500
Hip replacement	33%	$5,300	$1,100
Femoral or inguinal hernia repair	53%	$2,200	$560
Knee replacement	38%	$5,200	$1,100
Laparoscopy	48%	$2,800	$540
Male contraception (e.g. vasectomy)	46%	$1,200	$510
Total mastectomy (remove breast)	50%	$3,800	$520
Pacemaker	53%	$2,600	$60
Patella stabilisation (stabilise the kneecap)	35%	$3,500	$1,300
Prostatectomy (endoscopic)	46%	$3,400	$820
Pterygium surgery	58%	$1,700	$250
Removal of skin lesion	52%	$1,700	$500
Retinal detachment repair - surgery	54%	$3,300	$400
Rotator cuff repair	32%	$3,900	$2,000
Septoplasty	29%	$2,700	$1,000
Shoulder replacement	32%	$6,000	$2,500
Sinus surgery	39%	$3,400	$840
Sleep studies	99%	$730	$20
Sleeve gastrectomy (partial stomach removal)	51%	$3,200	$880
Stress incontinence	45%	$3,000	$1,500
Tonsillectomy with or without adenoidectomy (12 years of age and over)	30%	$2,100	$1,300
Turbinectomy (remove small nasal bones)	24%	$1,800	$860
Umbilical hernia repair	57%	$1,700	$590
Vaginal delivery (no complications)	70%	$2,900	$500
Vaginal delivery (complex)	61%	$3,600	$500
Vaginal repair	49%	$3,300	$680
Varicose veins	53%	$1,900	$400
Wound debridement	66%	$1,700	$380

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	20%	$1,100	$400
Ankle replacement	17%	$4,400	$560
Knee reconstruction	16%	$3,800	$570
Knee arthroscopy	26%	$2,100	$390
Breast biopsy	20%	$2,100	$280
Breast reduction	12%	$9,400	$7,200
Caesarean section (complex)	38%	$4,400	$450
Caesarean section (no complications)	35%	$3,400	$400
Cataract surgery	30%	$1,900	$300
Colonoscopy	79%	$1,100	$130
Dialysis	NA	NA	NA
Gastric band	28%	$3,100	$500
Gastric bypass	21%	$4,800	$1,100
Gastroscopy	79%	$910	$130
Heart-related angiogram	85%	$2,000	$110
Heart valve replacement (not TAVI)	27%	$13,000	$470
Hip replacement (bilateral)	8%	$10,000	$5,500
Hip replacement	18%	$5,500	$730
Femoral or inguinal hernia repair	34%	$1,800	$280
Knee replacement	20%	$5,100	$600
Laparoscopy	29%	$2,500	$380
Male contraception (e.g. vasectomy)	33%	$980	$200
Total mastectomy (remove breast)	23%	$4,200	$500
Pacemaker	51%	$2,300	$50
Patella stabilisation (stabilise the kneecap)	17%	$3,200	$520
Prostatectomy (endoscopic)	32%	$2,900	$400
Pterygium surgery	21%	$1,700	$270
Removal of skin lesion	70%	$1,500	$250
Retinal detachment repair - surgery	13%	$3,500	$250
Rotator cuff repair	22%	$3,300	$520
Septoplasty	20%	$2,400	$580
Shoulder replacement	21%	$5,700	$620
Sinus surgery	27%	$2,800	$450
Sleep studies	96%	$730	$10
Sleeve gastrectomy (partial stomach removal)	35%	$3,500	$540
Stress incontinence	29%	$2,300	$260
Tonsillectomy with or without adenoidectomy (12 years of age and over)	21%	$1,600	$500
Turbinectomy (remove small nasal bones)	20%	$1,400	$480
Umbilical hernia repair	37%	$1,400	$270
Vaginal delivery (no complications)	69%	$2,800	$350
Vaginal delivery (complex)	45%	$4,300	$430
Vaginal repair	25%	$3,200	$420
Varicose veins	33%	$2,100	$300
Wound debridement	53%	$1,600	$200

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	23%	$1,300	$400
Ankle replacement	13%	$4,500	$5,700
Knee reconstruction	19%	$4,100	$1,000
Knee arthroscopy	25%	$2,300	$650
Breast biopsy	22%	$2,500	$700
Breast reduction	7%	$9,800	$7,800
Caesarean section (complex)	46%	$4,800	$500
Caesarean section (no complications)	41%	$3,600	$500
Cataract surgery	40%	$2,100	$450
Colonoscopy	80%	$1,200	$130
Dialysis	99%	$80	$0
Gastric band	NA	NA	NA
Gastric bypass	19%	$3,500	$500
Gastroscopy	80%	$960	$100
Heart-related angiogram	64%	$2,000	$10
Heart valve replacement (not TAVI)	32%	$16,000	$480
Hip replacement (bilateral)	16%	$8,400	$2,400
Hip replacement	19%	$5,000	$1,000
Femoral or inguinal hernia repair	28%	$2,100	$500
Knee replacement	22%	$4,800	$990
Laparoscopy	24%	$2,800	$690
Male contraception (e.g. vasectomy)	40%	$1,200	$440
Total mastectomy (remove breast)	21%	$4,200	$800
Pacemaker	42%	$2,700	$40
Patella stabilisation (stabilise the kneecap)	22%	$3,300	$900
Prostatectomy (endoscopic)	26%	$3,300	$580
Pterygium surgery	24%	$1,800	$450
Removal of skin lesion	35%	$1,800	$500
Retinal detachment repair - surgery	40%	$4,000	$630
Rotator cuff repair	21%	$3,400	$890
Septoplasty	23%	$2,500	$690
Shoulder replacement	16%	$5,400	$1,000
Sinus surgery	25%	$3,200	$760
Sleep studies	99%	$730	$10
Sleeve gastrectomy (partial stomach removal)	17%	$3,000	$850
Stress incontinence	16%	$2,600	$680
Tonsillectomy with or without adenoidectomy (12 years of age and over)	22%	$1,700	$570
Turbinectomy (remove small nasal bones)	26%	$1,500	$540
Umbilical hernia repair	29%	$1,700	$500
Vaginal delivery (no complications)	78%	$2,900	$300
Vaginal delivery (complex)	55%	$3,700	$450
Vaginal repair	30%	$3,300	$690
Varicose veins	17%	$2,300	$880
Wound debridement	37%	$1,800	$500

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	44%	$1,000	$270
Ankle replacement	NA	NA	NA
Knee reconstruction	19%	$3,500	$280
Knee arthroscopy	27%	$1,900	$190
Breast biopsy	54%	$2,300	$150
Breast reduction	9%	$5,600	$3,600
Caesarean section (complex)	25%	$5,000	$300
Caesarean section (no complications)	23%	$3,400	$250
Cataract surgery	49%	$1,900	$300
Colonoscopy	90%	$1,200	$120
Dialysis	NA	NA	NA
Gastric band	NA	NA	NA
Gastric bypass	12%	$4,200	$500
Gastroscopy	91%	$930	$100
Heart-related angiogram	92%	$2,100	$10
Heart valve replacement (not TAVI)	50%	$12,000	$300
Hip replacement (bilateral)	NA	NA	NA
Hip replacement	28%	$4,700	$350
Femoral or inguinal hernia repair	43%	$1,600	$200
Knee replacement	30%	$4,600	$350
Laparoscopy	20%	$2,600	$320
Male contraception (e.g. vasectomy)	38%	$880	$150
Total mastectomy (remove breast)	56%	$4,000	$210
Pacemaker	55%	$2,600	$40
Patella stabilisation (stabilise the kneecap)	21%	$2,700	$240
Prostatectomy (endoscopic)	47%	$2,700	$220
Pterygium surgery	55%	$1,900	$500
Removal of skin lesion	62%	$1,400	$250
Retinal detachment repair - surgery	NA	NA	NA
Rotator cuff repair	30%	$2,800	$250
Septoplasty	18%	$2,200	$530
Shoulder replacement	38%	$4,800	$300
Sinus surgery	25%	$3,100	$500
Sleep studies	NA	NA	NA
Sleeve gastrectomy (partial stomach removal)	15%	$3,500	$500
Stress incontinence	14%	$2,300	$500
Tonsillectomy with or without adenoidectomy (12 years of age and over)	19%	$1,500	$430
Turbinectomy (remove small nasal bones)	30%	$1,400	$400
Umbilical hernia repair	32%	$1,300	$150
Vaginal delivery (no complications)	56%	$2,900	$250
Vaginal delivery (complex)	45%	$3,100	$200
Vaginal repair	39%	$2,800	$350
Varicose veins	21%	$1,600	$160
Wound debridement	66%	$1,500	$160

Treatment	% with no out-of-pocket costs	Typical specialists’ fees	Patients typically paid
Adenoid removal	49%	$1,200	$510
Ankle replacement	NA	NA	NA
Knee reconstruction	47%	$3,500	$470
Knee arthroscopy	57%	$2,000	$450
Breast biopsy	22%	$2,700	$560
Breast reduction	6%	$8,800	$6,900
Caesarean section (complex)	72%	$4,900	$440
Caesarean section (no complications)	76%	$3,400	$280
Cataract surgery	85%	$1,700	$110
Colonoscopy	95%	$1,100	$110
Dialysis	NA	NA	NA
Gastric band	NA	NA	NA
Gastric bypass	76%	$3,800	$500
Gastroscopy	94%	$850	$130
Heart-related angiogram	92%	$2,000	$20
Heart valve replacement (not TAVI)	26%	$16,000	$350
Hip replacement (bilateral)	NA	NA	NA
Hip replacement	55%	$4,200	$450
Femoral or inguinal hernia repair	69%	$1,800	$300
Knee replacement	55%	$4,000	$350
Laparoscopy	56%	$2,600	$360
Male contraception (e.g. vasectomy)	53%	$1,100	$470
Total mastectomy (remove breast)	26%	$3,600	$500
Pacemaker	62%	$2,000	$50
Patella stabilisation (stabilise the kneecap)	47%	$2,800	$350
Prostatectomy (endoscopic)	49%	$2,800	$720
Pterygium surgery	75%	$1,500	$210
Removal of skin lesion	54%	$1,500	$260
Retinal detachment repair - surgery	NA	NA	NA
Rotator cuff repair	58%	$2,800	$440
Septoplasty	21%	$2,700	$510
Shoulder replacement	62%	$4,400	$300
Sinus surgery	31%	$2,800	$500
Sleep studies	99%	$760	$70
Sleeve gastrectomy (partial stomach removal)	35%	$6,300	$4,000
Stress incontinence	31%	$2,400	$1,200
Tonsillectomy with or without adenoidectomy (12 years of age and over)	25%	$1,500	$550
Turbinectomy (remove small nasal bones)	27%	$1,500	$530
Umbilical hernia repair	69%	$1,500	$220
Vaginal delivery (no complications)	83%	$2,700	$190
Vaginal delivery (complex)	NA	NA	NA
Vaginal repair	56%	$3,300	$870
Varicose veins	64%	$1,600	$40
Wound debridement	61%	$1,700	$460

Frequently asked questions

"No gap" is an agreement where your specialist charges only the Medicare Benefits Schedule MBS fee. Your private health fund then covers the remaining amount above what Medicare pays, meaning you have no out-of-pocket costs for the doctor's fee. A "known gap" arrangement means your specialist charges a bit more than the MBS fee but has an agreement with your health fund to limit your out-of-pocket payment to a specific agreed amount. This means you will pay a small fixed fee per service. Always confirm these arrangements with your specialist and health fund before any treatment.
In a public hospital you will generally not pay any out-of-pocket costs for treatment if you are admitted as a public patient. Medicare covers all the costs including doctor's fees and accommodation. In a private hospital you will typically have out-of-pocket costs. Medicare pays 75% of the Medicare Benefits Schedule (MBS) fee for your doctor's services and your private health insurance will cover some of the remaining fees and hospital costs. Any amount charged by the doctor above the MBS fee becomes your out-of-pocket expense or gap.
Private health insurance generally does not cover the cost of emergency department visits in either public or private hospitals. These services are typically covered by Medicare. If you are admitted to a private hospital from the emergency department, your private health insurance would then start to cover your inpatient costs according to your policy and any applicable waiting periods or excesses. If you attend a private emergency department and are not admitted you will usually pay for the consultation yourself.
Generally most out-of-pocket medical expenses are not tax deductible in Australia. However there are specific situations where some medical related expenses might be deductible, such as for certain medical travel or if you are eligible for the National Disability Insurance Scheme (NDIS). It is always best to check with a qualified tax advisor or the Australian Taxation Office for personal advice.
Waiting periods are the time you must wait after buying your health insurance before you can claim benefits for certain treatments. If you receive treatment during a waiting period you will have to pay the full cost of the service yourself leading to out-of-pocket expenses. Common waiting periods include 2 months for most hospital treatments, 12 months for pre-existing conditions and 12 months for pregnancy and birth (obstetrics). Always check your policy's Product Disclosure Statement PDS for specific waiting periods.
Hospital cover helps pay for the costs of in-hospital treatments such as accommodation, theatre fees and doctor's fees when you are admitted as a private patient. This covers services like surgery, diagnostic tests and intensive care. Extras cover sometimes called ancillary cover helps pay for services received outside of a hospital. This can include things like dental, optical, physiotherapy, chiropractic treatment and remedial massage. It is designed to cover day-to-day health services.

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Tim Bennett

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A seasoned journalist with over 10 years of experience in news, politics and finance reporting, Tim has previously held roles at the ABC, SBS and Fairfax Media. Tim’s expert insights have been quoted in The Australian, The Daily Telegraph, The Courier Mail and more. He regularly appears on TV and radio, and has been interviewed on 7 News, Sunrise, SBS News, ABC Local, 3AW and 5AA. Tim is passionate about simplifying complex insurance topics for Australian consumers. He holds a Bachelor of Arts (Politics) from Macquarie University and a Tier 1 General Insurance (General Advice) certification, which meets the requirements of ASIC Regulatory Guide 146 (RG146). If you’re interested in a media interview with Tim, please reach out to our PR team at aupr@finder.com. See full bio

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